From Reuters: Japan will alter regulations to give foreign investors tax breaks on sharia bond dividends, the latest country to pursue Islamic finance to woo investors demanding sharia-compliant assets. Islamic bond dividends received by foreign investors may be declared tax-free as early as end-2011.
As neighboring countries had already changed or been changing tax systems to exclude Islamic bonds from taxation, "Japan also has understood the necessity of enhancing the attractiveness as an investment destination," a Japanese FSA official said..............................................Full Article: Source